RNS Number : 2205B
Pennon Group PLC
15 February 2011
15 February 2011
PENNON GROUP PLC
INTERIM MANAGEMENT STATEMENT
Financial performance at Pennon Group Plc since 1 October 2010 has been in line with management expectations.
Having successfully completed the K4 regulatory contract (2005 - 2010), South West Water has a solid platform in place for success during the next regulatory period (K5, 2010 - 2015). The first half of 2010/11 benefitted from strong summer demand from customers for water compared to the first half of 2009/10 (a 4.4% increase). December 2010 was the coldest December in 100 years and caused a surge in burst pipe incidents for both our customers and our network. However, the financial impact of this is not expected to be material.
Viridor continues to perform well and remains confident of delivering full year growth in profit before tax, in spite of the severe weather in December which had a significant impact on operations. Also in December Viridor won planning appeals for the development of energy from waste facilities with a total capacity of 600,000 tonnes waste and 47MW renewable energy at its landfill sites at Ardley (Oxfordshire) and Dunbar (East Lothian). As recently reported, in line with Viridor's strategy of making infill acquisitions in key strategic areas, the company has acquired a recycling company in Somerset for £7.4m and two smaller recycling companies in the Manchester area for a total of £2.5m.
As flagged at the Half Year, capital expenditure in both businesses in the second half of 2010/11 is expected to be significantly higher than in the first half. However gearing levels are forecast to be not materially different from the position reported in November.
Further information on Pennon, South West Water and Viridor can be found on the
Group's website, www.pennon-group.co.uk
For further information, please contact:
David Dupont - Group Director of Finance 01392 443998
Jo Finely - Investor Relations Manager 01392 443401
Sally Hogan 0207 251 3801
Cautionary statement in respect of forward-looking statements
This document contains forward-looking statements relating to the Pennon Group's operations, performance and financial position based on current expectations of, and assumptions and forecasts made by, Pennon Group management. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "anticipates", "aims", "due", "could", "may", "should", "expects", "believes", "intends", "plans", "targets", "goal" or "estimates". By their very nature forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will or will not occur in the future. Various known and unknown risks, uncertainties and other factors could lead to substantial differences between the actual future results, financial situation, development or performance of the Group and those expressed or implied in this document. These risks, uncertainties and factors include, but are not limited to, changes in the economies and markets in which Pennon Group operates; changes in the regulatory and competition frameworks in which Pennon Group operates; the impact of legal or other proceedings against or which affect Pennon Group; and changes in interest and exchange rates. Further details of Pennon Group's principal risks and uncertainties are set out in Pennon Group's 2010 Annual Report which can be viewed online at pennon-group.co.uk/pennongroup/uploads/financialreports/Annual_Report_ 2010.pdf. Undue reliance should not be placed on forward-looking statements which are made only as of the date of this document. Nothing in this document should be construed as a profit forecast. The Group accepts no obligation publicly to revise or update these forward-looking statements or adjust them as a result of new information or for future events or developments, except to the extent legally required.
15 February 2011
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